A very important product used in the manufacturing sector as well as in energy production is the crude oil. This is in great demand all over the globe as it can be refined to produce many everyday products like gasoline, heating oil, diesel, medicines, jet fuels, fertilizers and cosmetics. It is a product that is traded in very high volumes all over the world. The price of crude has a major impact on the global economy. The commercial viability and the political factors have a clear say on its price. If the prices are on the higher side over a long period of time, then it will have a direct impact on the prices of many products like plastics, fertilizers and so on.
Keep an eye on oil price
Any energy trading company in Singapore will have traded commodities like crude oil and its products like naphtha, kerosene, LPG, etc. As a trader, you need to be on your toes when dealing with crude as a commodity. The price of this product is highly volatile. If the price tends to stay high for a longer period of time, the companies will take steps to reduce the price. Also, having the crude oil price at a low for a longer time will dent the global economy. When the price is low in the global market, the importers will increase their purchase of crude in order to boost their stock. The groups producing it will slow down the production. So, as a trader you will have to be very watchful and have an eye on the price movements all the time.
How crude oil is traded?
Crude oil futures are exchange traded contracts between the seller and the buyer. The buyer in the contract will take delivery of a specific amount of crude oil barrels from the contract seller at a fixed price for delivery in the future. You will get a chance to trade the crude oil futures without needing to physically trade the oil. This way you do not need to take delivery of the oil from the energy trading company. You can buy and sell the crude oil commodity on Forex platform and this is slightly different from other commodities buying and selling.
When you are involved in crude oil futures and if a lot of your money is invested in this business, it is vital for you to be fully aware of the restrictions and the limitations of buying and selling times. But, with a great opportunity to gain access to this highly popular fast moving product in the market, you can do wonders as a trader. To buy crude oil futures, you will have to open an account with a broker who deals with futures trades.